Homeowners Insurance Policy

Homeowners Insurance Policy is divided into 2 sections: property and personal liability. Coverage extends to cover all residents of the household and the policy covers the dwelling, contents, loss or damage of personal assets and injuries that arises while on the property.

Homeowners Insurance Policy Should Include:

Property Coverage Includes:

  • Dwelling – Dwelling coverage is the part of a homeowners insurance policy that will pay to rebuild or repair the physical structure of your home if damaged. Your house and connected structures (i.e. attached garage).
  • Personal Property – Covers your belongings, such as furniture, clothing, sporting goods or electronics, in the event of a covered loss – whether they get damaged at your home or apartment or anywhere in the world. Imagine turning your home upside down. Everything that falls out is considered personal property. Personal property coverage should always be written on a replacement cost basis.
  • Loss of Use – Reimburses you for additional living expenses while your home is repaired or rebuilt. It may also reimburse you for lost rental income. No deductible applies to Loss of Use coverage. However, you may be responsible for a deductible for other parts of your claim.
  • Medical Payments – Covers you if a guest is injured at your home. This coverage is meant for small claims. Medical payments would cover the medical costs as long as the costs don’t exceed the limit.

Personal Liability Coverage Includes:

Personal Liability insurance is about financial protection for you and your family. This coverage provides for a defense if you are sued, and can pay damages to injured persons up to the limit of liability (typically $1,000,000).

Under your basic homeowners insurance policy, personal liability coverage may protect you for the following circumstances, up to your policy limits:

  • Bodily injury to another individual
  • Lawsuits you may face if an accident occurs
  • Property damage that occurs as a result of your negligence

Liability for driving a car or damages and injuries caused by you when operating a vehicle is not covered under Personal Liability. Liability for driving a car must be covered by an Automobile Insurance policy.

If the liability limits on the policy doesn’t fully meet one’s needs, one should consider additional coverage such as a Personal Umbrella, which provides an extra layer of personal liability protection.